Mercedes-Benz Cuts Forecast as China Sales Slump; Chinese Chipmakers Surge

In late July 2026, German automaker Mercedes-Benz lowered its annual sales forecast, citing persistent weakness in the Chinese market. The company also wrote off over 700 million euros related to its China operations. This reflects a broader slowdown in demand for luxury cars in China, which has hit foreign automakers particularly hard.

At the same time, Chinese semiconductor companies are making headlines. Memory-chip maker CXMT completed a blockbuster initial public offering, creating a $192 billion windfall for its home province and making it China's most valuable listed company. This comes amid reports that China has overcome US export restrictions with a breakthrough in AI chip technology, and as Chinese AI tools like Deepseek, Qwen, and Kimi gain attention. While Chinese firms push for AI independence, market reactions suggest a more complex picture.